Fiat Chrysler to pay almost $800 million to settle cheating allegations on emission tests

Fiat Chrysler is paying out nearly $800 million to settle allegations it cheated on emissions tests.

Photo: Marco Bertorello / AFP / Getty Images 2017

Fiat Chrysler Automobiles agreed on Thursday to pay California $78.4 million as part of a larger agreement with federal regulators, to settle allegations of cheating on diesel emission tests.

The automaker agreed to pay a total of almost $800 million, an estimate it had earmarked as “diesel probes” in its recent third-quarter earnings, to the California Air Resources Board, the state’s air pollution regulatory agency, and federal agencies including the Department of Justice.

The company is accused of circumventing emission standards set by the state and the Environmental Protection Agency by installing defeat devices, a charge it denies. In this instance, the defeat device was software designed to falsify carbon emissions during lab testing, regulators said.

Jeep Grand Cherokees and Dodge Ram 1500s made from 2014 to 2016 are the models affected, and of the 100,000 vehicles affected nationwide, 13,000 are in California.

“We acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us,” Mark Chernoby, the company’s head of North American safety and regulatory compliance, said in a statement.

The settlement comes two years after a high-profile case involving Volkswagen in which the German automaker admitted to falsifying emission standard data on more than 11 million cars worldwide. That company paid out close to $30 billion in fines globally, the largest settlement in automobile industry history.

“This settlement is a direct result of the enhanced screening and testing procedures (the California Air Resources Board) developed to uncover the Volkswagen diesel cheating scandal,” Mary Nichols, chairwoman of the board, said in a statement.

Fiat Chrysler said it is working on identifying vehicles affected and is in the process of setting up service appointments.